Stock futures are slightly higher following yesterday’s selloff. Comments by the Fed’s Lacker in the late morning sent equities falling into the close. JP Morgan (JPM) released its fourth quarter results, and its EPS was light while its revenue came in slightly below the consensus outlook. The earnings season will soon be in full swing, and will be the focal point for investors over the next few weeks. Investors will also be watching an advance retail sales report which is scheduled to be released at 7:30 am CT. The CBOE Volatility Index (VIX) spiked higher by 9% yesterday as stocks took a hit. The ‘Fear Gauge’ was actually lower for half of the session before further downside in equities had traders scrambling to buy options. Despite the big downturn, volatility remains low. Any expected movement in stocks on the back of earnings news may be muted as both banking giants (JPM, WFC) are moving very little this morning after their quarterly reports.
Treasuries are lower and are reversing the gains from the last few sessions. The 10-year yield fell to 2.8% yesterday but should recover some today. Volume was rather heavy overnight as most traders are back from the holiday season. European sovereigns are mixed with German Bunds outperforming despite a jump in German industrial production and a surprise drop in U.K. headline inflation. The Japanese Nikkei plunged over 3% which sent bonds higher in Asia. Sources say there will be more investor nervousness over Fed-speak from hawks Plosser and Fisher this afternoon. The NFIB just reported its small business optimism index rose to 93.9 in December from November's 92.5.
Stock Stories:
Wells Fargo (JPM) – Flattened – The banking giant posts quarterly results that are basically in-line with expectations. The company is optimistic on 2014 as economic conditions improve. The shares are flat to down slightly in the pre-market.
Google. (GOOG) – Searched and conquered – The internet giant is to acquire Nest Labs for $3.2B. The company also gets an analyst upgrade this morning and is just below its all-time highs. The stock is up 1.3% ahead of the opening bell.
Major Economic Reports:
6:45 am CT – GS Store Sales - up 1.3% for year
7:30 am CT – Retail Sales
7:30 am CT – Import & Export Prices
9:00 am CT – Business Inventories
11:45 am CT – Fed’s Plosser Speaks
12:20 pm CT – Fed’s Fisher Speaks
